Bull s
JK Holdings
Quarterly ReportInternationalJuly,2022
CONTENTS

67No.

P1 JK Holdings consolidated ﬁnancialsummary for ﬁscal year ending March 2022

P2 Business Prospect for July ‒ September 2022
P3 Market Outlook of Plywood
JK Holdings moved to Prime Market ofTokyo Stock Exchange
P4 BUTSURIN made an agreement with
Yoshidajima Senior High School
Prec Component provides timber oﬀcuts to thelocal community

JK Holdings consolidated
ﬁnancial summary forﬁscal year ending March 2022
The turmoil continues due to various restrictions imposed by
COVID-19 and Russia's invasion of Ukraine. Meanwhile,
housing starts are steady, increasing about six to seven percent\HDURQ\HDULQERWKRYHUDOO¿JXUHVDQGWKHRZQHURFFXSLHG
housing sector, which is the mainstay of our group.
Under these circumstances, our group put the priority measures of the medium-term management plan “Breakthrough21” into practice with an eye toward the next generation. Ourstrengths include the involvement in distribution of woodbased building materials all the way through from upstream todownstream, as well as its manufacturing and processing
divisions and overseas divisions. Furthermore, we have built
strong relationships with manufacturers as a leading wholesaler of wood-based building materials. Maximizing these inteJUDWHGVWUHQJWKVDVDJURXSZHKDYHVWULYHGWRVHFXUHDVXI¿cient quantity, and procure and produce alternative materials
in order to supply a full range of housing materials.
$VDUHVXOWRXUFRQVROLGDWHG¿QDQFLDOSHUIRUPDQFHIRUWKH
¿VFDO\HDUHQGLQJ0DUFKDUHDVIROORZVNet sales rose 9.6% from the previous year to 376.12 billion
yen, much higher than a growth of 6.6% in overall housingstarts. We have introduced a new accounting standard forKeiichiro AokiPresident
JK Holdings Co.,Ltd.

UHYHQXHUHFRJQLWLRQWKLV¿VFDO\HDU7DNLQJLQWRDFFRXQWWKH
amount of 16.994 billion yen affected by this change, net sales
stood at 393.114 billion yen, a double-digit increase of 14.5%
year-on-year.
$VIRUSUR¿WVRSHUDWLQJLQFRPHZDVELOOLRQ\HQ
times the result in the previous year, ordinary income was
13.111 billion yen (2.5 times) and net income attributable to
VKDUHKROGHUVRIWKHSDUHQWFRPSDQ\ZDVELOOLRQ\HQ WLPHV 7KHUHDVRQVIRUWKHXQSUHFHGHQWHGVLJQL¿FDQWJURZWKVLQSUR¿WVLQFOXGHWKHUREXVWLQFUHDVHLQWKHRSHUDWLQJUDWHDW
KEY TEC Yamanashi plywood factory which started operation three years ago, as well as our careful control of purchaseand sales in both quantity and quality.
The outlook is expected to remain uncertain due to supply
chain disruptions, rising material prices and logistics costs,
FXUUHQF\ÀXFWXDWLRQVDQGULVLQJLQWHUHVWUDWHV8QGHUWKHVH
circumstances, our group has set forth a long-term vision³%UDQG1HZ-.+'´DLPLQJWREHUHERUQDVDPRUHDWWUDFWLYHFRUSRUDWHJURXSZLWKWKHWDUJHW\HDURI¿VFDO)RU)<WR)<DVWKH¿UVWSKDVHRIWKHYLVLRQDQGWKH¿UVWVWHSWRZDUGIXUWKHUJURZWKZHKDYHformulated a new medium-term management plan “FurtherGrowth 24”. We will continue to address current issues
while maintaining the growth and expansion.

Bulls International No.67

2Survey
Business Prospect forJuly ‒ September 2022
〈Demand Forecast byBuilders and Distributors〉
Japan’s GDP for January to MarchDQQRXQFHGE\WKH&DELQHW2I¿FHGHFOLQHGIURPWKHSUHYLRXVTXDUter, turning to a negative growth for the¿UVWWLPHLQWZRTXDUWHUV7KHUHDO*'3
JURZWKUDWHIRU)<LQFUHDVHG
IURPWKDWRI)<7KH-DSDQHVH
economy is on a recovery trend, butthere remains a sense of lagging behind
Europe and the U.S.
+RXVLQJVWDUWVIRU)< $SULO
WR0DUFK LQFUHDVHGWRXQLWV \HDURQ\HDU EXWWKH\
were at a low level that failed to reach
Demand Forecast by Builders
100-10
-20
-30

-34.5

-50

-46.0

-40
-60
-70

Under the circumstances, we conducteda survey about business demand prosSHFWVIRU-XO\WR6HSWHPEHU
According to the survey, both smallbuilders (contractors and other buildingcompanies) and distributors predicted anegative index compared to the previRXVVXUYH\IRU$SULOWR-XQH
showing a decline for two surveys in arow.
With the uncertain outlook for the
global economy, including Russia'srestrictions on some wood products
export, the rapid depreciation of theyen, the price hikes for materials, andcity-wide lockdowns in China, we willkeep an eye on how these uncertainties
will affect the housing
industry in the coming
months, as well as on
the next business pros1.5
pect survey for October-9.0 -10.0
and beyond.

-21.1

-40.6

2020

Jan-Mar.
2021

Jul-Sep.
2021

Jan-Mar.
2022〈Various Topics〉
As to what worries the respondents, themajority (57.5%) were concerned about“purchase price hikes” due to soaring
material prices, followed by “passingon higher cost to customers” at 17.2%.
It is inferred that concerns stemmingfrom rising costs are growing among a
number of businesses.
While still wary of COVID-19, businesses are becoming more active inusing digital and online services, aswell as in-person activities.

The forecast survey for July ‒ September, 2022 is based on the totaled data
gathered from 3,000 client companies in Japan through the internet, which
took place from late-April to mid-May, 2022.

Jul-Sep.
2022

Point0=business result in April-June,1992

Dealing Volume of Lumber

Demand Forecast by Distributors
1065-1.30-20

55

-15.6

-26.2

-30

50

-43.1

-40

-38.0

-50

45

-48.5

-60

40-68.6 -66.7
Jul-Sep.
2020

Laminated lumber
Solid lumber
Precut lumber
LVL60-13.0-10-80In the sales forecasts by major manufacturers, the number of positive views
shrunk in all the sectors, and the majorLW\RIUHVSRQGHQWVIRUHFDVWHGÀDWFRPpared to the previous year. In particular,the three sectors other than housing
equipment showed more negative
predictions. Although the overall
housing starts increased for the 13th
consecutive month year-on-year, housing starts of owner-occupied houses
decreased for the 4th consecutive
month since last December. This suggests the cautious attitude of the respondents.

-65.4
-67.0

-80 Jul-Sep.

-70〈Sales Forecast by Leading
Manufacturers〉

XQLWVIRUWKHWKLUG\HDULQDrow, according to the housing statistics
released by the Ministry of Land,
Infrastructure, Transport and Tourism.

Jan-Mar.
2021

Jul-Sep.
2021

Jan-Mar.
2022

35 Jul-Sep.

Jul-Sep.
2022

2020

Jan-Mar.
2021

Jul-Sep.
2021

Jan-Mar.
2022

Jul-Sep.
2022

Point100=all responses expect increase

Point0=business result in April-June,1992

Sales Forecast by Major Supplying Manufacturers（Jul-Sep. 2022）
increase

Plywood（13ﬁrms）
Wooden Building Materials（10ﬁrms）
Ceramic/Heat Insulation（15ﬁrms）

over15％14 〜 10％

below10％0.0

0.0

18.24.5

9.1

0.0

0.0

level-oﬀ

decrease
below10％10 〜 14％

over15％

63.6

18.2

0.0

0.0

18.2

50.1

9.1

4.5

4.5

26.9

65.5

3.8

0.0

3.8

House Equipments（9ﬁrms）

0.0

4.0

8.0

64.0

20.0

0.0

4.0

average

1.1

3.3

17.8

60.8

12.8

1.1

3.1

Bulls International No.67

Trend
Market Outlookof Plywood〈Trend of Japanese Plywood〉
Japan’s production of softwood plyZRRGLQ$SULOZDVFXELF
PHWHUV \HDURQ\HDU DQG
shipment was 251,675 cubic meters ,QYHQWRULHVZHUH
cubic meters (97.7%).
Inquiries of Japanese softwood plywood and shipment of mainly 12-milliPHWHUSURGXFWVDUH¿UP$OWKRXJKmanufacturers' inventories are slightly
increasing, it is considered that they are
not so large as to be a problem yet.
Japanese manufacturers are rapidly
shifting the materials to Japanese
species in the wake of the Russian
wood embargo, and this trend is expected to continue for the time being.
Manufacturer prices have continued torise every month, which users are
accepting at the moment, but it seemsto be gradually approaching a sensitive
phase, depending on the number ofhousing starts in the near future.

〈Trend of Imported Plywood〉
Japan’s import of plywood in AprilZDVFXELFPHWHUV
(113.1% year-on-year), an increase ofIURPWKHUHVXOWVRI
cubic meters in the previous month.

Looking at the result by country oforigin, the amount of imported plywood showed 79,629 cubic meters IURP0DOD\VLDFXELF
PHWHUV  IURP,QGRQHVLDDQG
FXELFPHWHUV  IURPChina.
As products continue to arrive in ports
more than they are shipped out to themarkets, the number of port warehouses with more inventories than theircapacity is increasing nationwide, andsome of them have begun to limit theamount of cargo coming into port. The
market of 12-millimeter plywood

mainly produced in Malaysia maintains
D¿UPFRQGLWLRQEXWVKLSPHQWRI
ordinary plywood from Indonesia witha large arrival at ports is sluggish
because buyers keep only spot purchasing. Arrival of structural plywood fromChina, which would be a substitute forJapanese softwood plywood, is growing. We will keep a close eye on whether this will have an impact on Japanesesoftwood plywood in the future. It isexpected that the tendency to purchaseminimum quantity for immediate
requirements becomes stronger for thefuture due to the unprecedentedly highmaterial prices.

Wholesalersʼ Prices of Plywood in Tokyo

yen/sheet

4,500
4,000
3,500
Structural Use 12mm JAS F4☆
Concrete Form 12mm JAS
Softwood Plywood for Structural Use 12mm JAS F4☆
Softwood Plywood for Structural Use Neda-non 24mmwith tongue JAS F4☆

3,000
2,500
2,0001,500
1,000Jan. 2022 Feb. 2022 Mar. 2022 Apr. 2022

May 2022 Jun. 2022

Topics 1

JK Holdings moved to Prime Market ofTokyo Stock Exchange
JK Holdings Co., Ltd. moved to the Prime Market of the Tokyo Stock([FKDQJHWKDWUHRUJDQL]HGLWVPDUNHWFODVVL¿FDWLRQLQWRWKUHHDV
SULPHVWDQGDUGDQGJURZWKPDUNHWVLQ$SULO7KH3ULPH0DUket is positioned as the signature market of the Tokyo Stock Exchange, attracting many foreign investors. We will aim for furtherdevelopment as a prime market listed company by setting goals suchas increasing the number of outside directors, strengthening ourefforts to address sustainability issues, and preparing an environmentthat facilitates investment by institutional investors.
Commemorative plaque received as proofof a prime market listed company

3

4Bulls International No.67

BUTSURIN made an agreement withYoshidajima Senior High School

Topics 2that teaches the knowledge and techniques necessary for using forest products, in addition to classes of forest
science, forest management, and landscape planning.
Classroom in Yoshidajima Senior High School

BUTSURIN CO., LTD. concluded anagreement on collaboration and cooperation with Kanagawa Prefectural Yoshidajima Senior High School on 25 April.
BUTSURIN CO., LTD. will provide
classes based on actual business needs
about once every two months at theschool. The company's employees withknowledge and experience will teach“Forest products utilization”, a course

2YHUWKHODVWWR\HDUVVRFLDO
interest in timber and forestry that are
sustainable resources has increased,
and human resource development has
become a major issue. BUTSURIN
CO., LTD. will contribute to the development of human resources who will
support forests, forestry industry, andgreening by sending employees to teachforestry subject at classes and instructLQJSUDFWLFDOZRUNDWIRUHVWVIRU¿HOG

Prec Component provides timber oﬀcuts
to the local community
Prec Component Co., Ltd. has beenworking on the effective use of timber
RIIFXWVVLQFH)HEUXDU\7KH
company previously contracted with
FRPSDQLHVWKDWSLFNXSDERXWFXELF
meters of timber offcuts annually for afee, but decided to provide the localcommunity with products including
blocks, stepstools and plates that madeuse of the timber offcuts from theviewpoint of effective use of resources.
The products are mainly provided tolocal childcare facilities and elementaryschools.

practice. This agreement with theYoshidajima Senior High School will
ODVWXQWLO0DUFKDQGZLOOEH
renewed every three years thereafter.

Signing ceremony

Topics 3

These continuous efforts were evaluated and the company received a letter ofappreciation from the mayor of Higashi-Hiroshima City in December:KHQDORFDO.RXFKL+LJK
School student dedicated a Ema (small
wooden plates on which people write
their wishes and dedicate them to theshrine) to Sugimori Shrine, Prec Component Co., Ltd. produced and provided
the Ema stand made from timber offcuts. The company will continue toprovide timber offcuts and contribute tothe local community.
Received a letter of appreciation
at Higashi-Hiroshima City Hall

Blocks made from timber oﬀcuts

Ema, using timber oﬀcuts for the stand, dedicated to Sugimori Shrine
Wood Land Tower 1-7-22 Shinkiba Koto-ku,Tokyo 136-8405 Japan
Phone +81-3-5534-3800 Fax +81-3-5534-3835
URL https://www.jkhd.co.jp
C 2022JK Holdings Publication Copyright○